State gives $9.1 million to fund JobsOhio, amid objections by Democratic party

Columbus -- The state Controlling Board has released more than $9.1 million in funding to six regional economic development offices that serve as local contacts for JobsOhio in its efforts to convince companies to expand -- but not before an official objection from the chairman of the Ohio Democratic Party.

The total includes more than $2.7 million for Team NEO, a joint effort involving Cleveland, Akron, Canton, Lorain and Youngstown and covering Northeast Ohio; $1.2 million for Regional Growth Partnership Inc. in Toledo, covering northwest Ohio; and $800,000 for the Appalachian Partnership for Economic Growth in Nelsonville, covering southeast Ohio.

The funding comes from the Ohio Third Frontier Commission, and the development groups are required to provide local matches.

JobsOhio was created by lawmakers shortly after Kasich took office in 2011 and was one of the Republican-controlled chambers' top priorities of the last session.

Supporters believe the nonprofit is better positioned to work with businesses considering expansions or relocations in Ohio, with executives feeling more comfortable discussing such matters behind closed doors.

But opponents, including Progress Ohio, say the setup is unconstitutional, funneling public money and resources to a private organization that is exempted from portions of the state's open meetings and records laws.

Funding for the nonprofit is being challenged. The Ohio Supreme Court last week agreed to hear a suit brought by Progress Ohio. If justices agree the liberal advocacy group has legal standing, the subsequent legal proceedings could leave the JobsOhio's status in question for years.

Democrats have called on Kasich to postpone a bonding plan for JobsOhio until after the matter is settled. On Jan. 28, state Rep. Chris Redfern, in his first term back in the chamber and continuing in his role as head of the state party, questioned the use of voter-approved Third Frontier monies to support the nonprofit's operations.

"I'm concerned that JobsOhio, because it's essentially a private institution, that there isn't the public oversight that was guaranteed upon passage of the Third Frontier...," Redfern said before objecting to the funding release. "Is there any recourse for taxpayers to get their money back if any of the deals JobsOhio or the regional partners [enter] fail to achieve the desired [outcomes]?"

But John Mahaney, legislative liaison for the Ohio Development Services Agency, said the actions of the regional JobsOhio partner offices are subject to scrutiny.

"The monies that are being used here for the JobsOhio regional network are under the same transparency guidelines that any other Third Frontier projects are," he said. "The network partners are required to provide regular monthly reports to us. Those reports are all audited. We do not provide any funds to the network partners until ... [the Development Services Agency] is satisfied that those dollars are being spent appropriately."

Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.